City has $4.4M to make up for in deficit

The City and Borough of Juneau has cut $4.8 million from its budget, but still has $4.4 million more to go before it will wipe out the projected deficit for fiscal years 2013 and 2014.

City Manager Rod Swope and Deputy Manager (and Manager-Designate) Kim Kiefer have established a sort of policy this year where positions are not being filled unless a department can show that position must be refilled. So far, the city has held open 9.6 Full Time Equivalent positions.

“When we realized this hole that we had, we started holding positions open,” Kiefer said at Tuesday’s city finance committee meeting. “We’re holding those open over the next two years. This also includes positions we’ve kept open in ‘11 and ‘12.”

This hiring freeze will save $1.6 million.

The documentation the city managers handed out with that information indicate that the two public works equipment operator positions are not sustainable cuts, the police officer (including lieutenant) and code compliance officer cuts are sustainable, however not desirable to keep open on a long-term basis.

“That’s part of how we came up with that $4.8 (million),” Kiefer said.

The other part came from department leaders taking a two-week furlough throughout this year, reduction in office supplies, printing and other similar costs. All those changes added up to a large chunk of the deficit.

“The impacts to the public: we’re not going to have police officers in the schools with the reduction of two officers, the pools are closing an hour earlier during weekdays, we’re closing libraries on holidays, we’ve reduced the rental times at Jumbo Gym, and we are no longer renting out Terry Miller Gym.”

Kiefer said there will probably be reductions in response time for code compliance issues, permitting also is likely to experience longer turnaround times. Police response time will also likely be impacted.

“We have included in the ‘13-‘14 budget some increased fees,” Kiefer said. “There is an increase in fees in Capital Transit, Parks and Recreation, ambulance billing fees. We were able to, by starting this process in this fiscal year, able to carry around $1.5 million savings in this years budget to ‘13-‘14.”

Swope said the budget process is still fluctuating.

“Budgets are moving targets,” he said. “As of Friday we were working under the assumption (the city was) short by $2.8 million. Based on other costs that came in, we were even further in the hole than we anticipated.”

City finance director Craig Duncan generally explained those costs to be associated with issues at one of the pools, increases in costs, and increases in assessment values.

He also said an estimated savings in downtown parking has not come to fruition for several reasons, including that the Juneau Police Department apparently is writing fewer tickets.

Swope had come up with a list of ideas for how to fill the rest of the $4.4 million gap. He emphasized that they were only ideas, not recommendations.

The five thoughts include using $1 million loaned to the airport for its runway expansion project, using some of the sales tax money currently in the sewer expansion and development Capital Improvement Project fund, cutting that from services and employee layoffs, increase the property tax mill levy, or use funds from the sales tax budget reserve.

Mayor Bruce Botelho said he was opposed to using any one-time fund to fill the gap — which would include the sewer CIP and sales tax reserve. He was also opposed to cutting further services.

“I think the answer is not further cutting our way out of this list,” he said. “To be candid, I am not particularly interested in using primarily one-time funds to cover much of the gap. It simply creates problems as it comes down the road. ... The recommendations from the fiscal policy group, we need to be beefing up our reserve. I think we need to be prepared to talk about a mill rate increase.”

He said the mill rate is currently 10.55, including the capital projects. The highest the city has been was 12 mills, and has been steadily declining on average for many years.

Botelho said he would also be in favor of looking at other tax mechanisms, using one example of how much he pays in taxes when renting a car in Anchorage.

Assembly Member Ruth Danner wanted to reexamine allowances under the senior sales tax exemption and an alcohol tax increase.

“Looking at our census projections, we’re going to be forced to look at that, but I don’t know if now is the time,” said Assembly Member Karen Crane.

Assembly Member David Stone agreed with Botelho’s inclination, particularly with the use of one-time funds. Stone said it would push bigger problems down the road, and in the past has said the shortfalls are probably not going to be short-term.

Assembly Member Johan Dybdahl said he also did not support further cuts to government operations.